Perception greater than fact

Itai-Masuku2.jpg

MANY who have done strategic management courses will remember the famous SWOT analysis method, where situations are analysed according to their Strengths, Weaknesses, Opportunties and Threats.

Editor’s Memo with Itai Masuku

What is often forgotten is how weaknesses can be turned into strengths and how threats can actually present opportunities. This implies going beyond Hannibal’s “I see no mountains” maxim to something like “I see the mountains, there must be tonnes of gold in their crust.”

Zimbabwe’s so-called US$45 billion infrastructure deficit as per World Bank figures is an opportunity for Build Own Operate Projects.

There is no problem at Zesa; there are opportunities to seriously push for Private Power Corporations. The shambolic state of the National Railways of Zimbabwe is yet another opportunity for investment.

Throughout 18th, 19th and 20th century history, introduction of railways always catalysed economic growth. The list is endless. It’s just a matter of how this is presented to investors.

We are all aware Zimbabwe is at a crossroads in terms of its economic direction.

On the one hand, it desperately needs to take a huge leap forward in creating an environment that is conducive to attracting both domestic and foreign investment, particularly the latter.

The country’s investment as a proportion of Gross Domestic ratio, estimated at 27% for this year can be improved. Locals are reluctant to invest in their own economy. While it often holds true that outsiders can see opportunities where insiders don’t, foreign investors often take a cue from local investors.

If the locals are not confident in investing in their own economy, why should they (foreigners) be? It therefore cannot be overemphasised that investment is the name of the game where governments want to foster economic growth.

On the other hand, it is also understandable that while Zimbabwe wants to foster growth, it wants growth with equity. In other words, it wants a trickle-down effect of each investment dollar to the proverbial man on the street, hence its promulgation of the land reform and indigenisation programmes.

For foreign investors in particular, these two programmes have presented the greatest threat to their investing in Zimbabwe. It is clear that government has dug in its heels on these issues.

Its weakness, however, has been in how it has sold the programmes abroad.

The fact that some investors, including Canadians are willing to invest under such conditions means there is manoeuvrable space.

Everything ultimately depends on how the programmes are packaged. If they are enunciated in a confrontational and aggressive manner, they will also be received by the international community as such.

It’s a simple process of communication. If you encode a message in a particular manner, it will be decoded as such at the receiving end. In this regard, perhaps a word of caution would be in order for the incoming Finance minister Patrick Chinamasa.

Maybe because of continuous bickering in the just-ended inclusive government, the respected man of laws has often been brazen when putting his points across. There is no doubt in legal circles that the man is a respectable lawyer; even his counterpart in the GNU Tendai Biti acknowledged that.

However, he must remember that he’s now handling a portfolio where perception, in this case investor perception, tends to have more impact than fact.

For instance, why, according to World Bank figures, did Guinea Bissau attract more private sector investment in (US$3,8 billion) 2011 than the rest of Africa? Yet, it’s such a small country, which on average many will fail to point to it on a map.

Moreover, it has all the worst indicators against it such as being on the lowest scale of the UNDP’s human development index as well as the lowest per capita GDPs in the world . It has a history of military coups and has been placed on the United Nations narco states list.

Surely, Zimbabwe’s record is better than that! What economic ministries, led by Chinamasa’s, have to package are the opportunities presented by Zimbabwe’s threats.

This should be food for thought for the incoming government.

6 thoughts on “Perception greater than fact”

  1. The Great Architect says:

    Politicians are not Businessmen and vice versa. If anyone has to deliver its the Capitans of Industry. Mugabe’s mandate is to keep ZANU in power at whatever cost. Captians of industry’s mandate should be to grow their businesses to multinationals at whatever cost. If a single American company like Walmart can turnover $500 billion worldwide. And Zimbabwe with 95% literacy rate, a quarter of the world diamonds amongst other minerals such platinum, gold etc is still crying foul about not been able to shop at Harrods. Seriously guys, you need to get your heads out wherever they are suck and get the economy going.

    If only another Mugabe could rise in business to take on the world. After all, all that is needed is one man: a visionary and architect. We don’t need investors we are the investors. If you buy a residential in Borrowdale to build a mansion, do you go find an investor to help you build the mansion as a consequence he owns 49% of the property? No! Then why can’t we apply the same concept in business. Excuses excuses, blame it on the politicians, no liquidity crunch or is it the West cause they don’tlove us anymore.

    Zimboz grow up you want Mugabe to go find you the building materials and money as well, on top of givingyou the land FREE!

    1. lovemore says:

      @ Greatest Architect.

      Yes politicians are no business man but their decisions can affect how a business man reacts to situations. There is great inter-linkages between how businessmen act and the policies of politicians. The uncertainty that is currently sweeping across our country have a lot to do with political activities and decisions. The business man will put in place strategies that reduce the risk of losses. Prior to 2008 our government used depositors’ monies which rendered a lot of businesses bankrupt including pensioners’ funds. Presently we do not know how much the diamonds will be able to contribute to the fiscus yet we already have annoucements that the civil service salary bill will go up. Where is that money going to come from? As a serious businessman (whose business model depends on deposits for maximum profits, supermarkets etc) I will tend to approach the issue of deposits in Zimbabwe with caution until such a time when the risk of deposits loss becomes nil to zero. A political decision in 2009 of using the US$ has had profound effect on results of all the companies in Zimbabwe. Some have collapsed while most have been able to recapitalize and declare profits. Most business people can now plan and strategize with some degree of certainty and that is how it should be. The degree of certainty will always help in business people in modeling their entities accordingly in terms of finance requirements for the next 1-3-5 or 10 years, operational costs, product launch and development etc. Even the indeginization model should be made definite so that the business people can model their plans accordingly. To me the politician does have a great influence on the ability of the business man to buy a brick, plan to buy a brick or even make the brick.

  2. Chris Veremu says:

    Would one say that the appointment of Chinamasa was so awe inspiring, jaw dropping, face melting or it put lumps in throats as to get the key players in the economy to say as one..”Now real work begins” or did you hear..” Is that Nyaradzo Funeral Services, I am calling to inform you that I am bringing my DEATH forward?” Seriously would one say with a straight face that people out there are saying with Chinamasa on the wheel, “Finally our prayers have been answered?” or do you have people queuing up at medical dispensaries to buy whole scale analgesics or allied substances and pleading with doctors to increase dosages of same.Or people are liquidating whatever of theirs left so that they can create as much distance with the motherland as they possibly can…Frankly, I wish I could look into the future, no easy task in broad day light now with all this darkness around….But then who knows, after the election, most folk myself included have stopped predicting the future.

  3. JHV says:

    And how is it currently “packaged” to the investors – as dictatorial, self destructing, racist, vindictive, vengeful, above any rule of law, available only to the elite, greedy, corrupt, self enrichment of the elite – with the clear indication that the investor will have to go down on his knees – and grovel all along without any real protection from any quarter. In many cases it was plain theft from ordinary Zimbabweans.

    If I was an investor is this attractive and should I be interested at all ? – No thank you!

  4. Chris Veremu says:

    I dont know what is going on behind the scenes at the Independent but dude, you were missed. Now please promise to stop this disappearing act of yours..its not funny. We need you as promised every Friday, whatever you do elsewhere cant be more important than our weekly dose of direction from your pen otherwise nothing makes sense anymore.

  5. E Makhate says:

    There is no enabling environment for business. Who will see an opportunity in a collapsed national railway system? What will be his return on investment? Who is likely to invest in Zesa? Who will pay for the electricity when Zanu is cancelling bills BUT does not compensate the service order. Such analysis will not work on a dysfunctional state like Cuba or our Zim.

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